How do American workers feel about their financial literacy and financial well-being? How do they feel about their employers and retirement? What are the changing dynamics of the American workforce and traditional retirement? Franklin Templeton’s Jackie Reardon joined Pacific Life’s Ahmet Kamil and Jim Breen to unpack these topics and more on The Wave Strength’s Retirement and the Need for Lifetime Income live webinar.
Top Takeaways
- Franklin Templeton’s The Voice of the American Worker 1 survey reveals how employees feel about retirement and what they expect from their employers.
- The concept of retirement has evolved, and the goal of financial independence has replaced traditional ideas.
- One size doesn’t fit all: Retirement planning is dynamic, and retirees need guidance, tools, and education to help navigate multiple variables and shifting priorities.
- A lack of financial literacy can negatively affect retirement outcomes.
- Financial wellness impacts our mental and physical well-being.
Using live polling, person-on-the-street interviews, and data from Franklin Templeton’s Voice of the American Worker survey, the Retirement and the Need for Lifetime Income webinar highlights how Americans feel about work, financial wellness, and retirement readiness. And, for the most part, employees don’t feel great about any of it. But the webinar also revealed opportunities for employers and providers to help participants improve their financial well-being and achieve their retirement goals.
The Voice of the American Worker survey asked over 1,000 employees how they feel about their financial well-being, work, and retirement—and the results are compelling. Key findings show that the Covid-19 pandemic played a large role in workers reevaluating their relationship with work and their employers: 67% of American workers have reassessed what they want from their employers, and 44% have left or have considered leaving their jobs. And the concept of retirement has evolved, 84% are more focused on becoming financially independent than on a traditional retirement. The survey also highlights workers’ feeling a lack of control over their financial health, with 83% noting that debt is a primary reason.
What Happened to Retirement?
As our panel discussed, the concept of retirement has evolved from traditional ideas, grounded in decades of employer-paid pensions, to modern concepts of financial independence; and this cultural shift appears to have outpaced our educational system. According to Forbes, in the U.S. only seven States require a personal finance class to graduate from high school. 2 It’s reasonable to draw a line from this rare academic requirement to deficiencies in financial literacy.
Ahmet Kamil underscored that our lack of financial education is partly due to America’s historical approach to retirement, “The assumption that resources like pensions would always be around, probably inhibited us from being more proactive about retirement education.”
And if you ask random people on the street how they feel about financial literacy, they agree. When The Wave Strength asked individuals how they feel about financial literacy, their spontaneous answers made it clear that employees are concerned about their lack of preparedness. One man in Chicago said, “Unfortunately, unless you do your own research, you’re left with what your parents taught you, and for a lot of us, that’s not much.” A beachgoer in California said, “I wish they taught financial literacy in high school and college, [to] make us more prepared for the future.”
But a lack of education isn’t the only reason for the changes in America’s retirement landscape. As Jackie pointed out, even the word retirement has become a part of the issue. “The industry needs new messaging that speaks to that, the word ‘retirement’ has lost its relevance, 84% of those surveyed said financial independence is their number one priority. People know they need to save for retirement, but they [also] need help with debt, an emergency fund, saving for kid’s school, and financial planning tools.”